By Glenn Chapman

SAN FRANCISCO, Jul 23, 2010 (AFP) - Microsoft ended its fiscal year with record revenue and stellar profit as businesses snapped from the malaise of the economic crisis and began updating computer gear.

Microsoft on Thursday reported a 4.52-billion-dollar profit on revenue of 16.04 billion dollars in its fourth quarter, which ended June 30.

"This quarter's record revenue reflects the breadth of our offerings and our continued product momentum," Microsoft chief financial officer Peter Klein said.

Microsoft credited the strong sales figures in part to the successful launch of its latest-generation Office 2010 software and to continued strong demand for its new Windows 7 operating system.

The popularity of its Xbox 360 videogame consoles and Bing's improving share of the Internet search market also contributed to the successful final quarter of its fiscal year.

"We saw strong sales execution across all of our businesses, particularly in the enterprise with Windows 7 and Office 2010," said chief operating officer Kevin Turner.

"We look forward to continuing our product momentum this fall with the upcoming launches of Windows Phone 7 and Xbox Kinect."

Kinect is an Xbox 360 accessory that lets people use natural gestures or body movements to command on-screen action.

Microsoft said it finished the fiscal year with record-high revenue of 62.48 billion dollars and profit of 18.76 billion dollars, or 2.10 dollars per share.

"It's been a great fiscal year and an outstanding fourth quarter," Klein said.

He added that Microsoft was encouraged by the resurgence of computer purchases by businesses that had shunned upgrading technology while riding out the global financial chaos.

The Microsoft division handling business products had record revenue in the final fiscal quarter and the "resurgence of the refresh cycle" was expected to continue through the coming year.

Windows 7 has become the fastest selling operating system and is already running more than 15 percent of personal computers worldwide, according to Klein.

Microsoft cautioned that emerging markets, such as China, where the company makes less money off its products were the "significant drivers" of the PC market.

Bing has gained market share for 13 consecutive months, earning over four percent since its launch in June of last year, according to Microsoft executives.

Online advertising revenue grew 19 percent during the recently-ended quarter.

Klein said Microsoft was on track for Bing to power North America searches at one-time rival Yahoo! by the end of this year.

Yahoo! and Microsoft have a Web search and advertising partnership that sets the stage for a joint offensive against Google.

Under the agreement, Yahoo! will use Microsoft's search engine on its own sites while providing the exclusive global sales force for premium advertisers.

Microsoft sold approximately 1.5 million Xbox 360 consoles, marking a 26 percent increase from the same period last year, and membership in the gaming system's Xbox Live online community tops 25 million.

Klein assured analysts that Microsoft will continue to keep a lid on costs, signaling that the company is treading cautiously when it comes to the global technology market's revival.

"Business spending has picked up," said analyst Matt Rosoff of private firm Directions On Microsoft, which tracks the Redmond, Washington-based technology colossus.

"Microsoft is back to being the steady, profitable company everybody knew a couple of years ago."

Microsoft killed its freshly-launched line of Kin smartphones on the last day of the fiscal year, pushing about 200 million dollars of loss into 2010.

"That isn't a whole lot of money in Microsoft terms, but it is sort of a debacle if you look at it on its own," Rosoff said of Kin's demise. "It is good they got that failure behind them."

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Copyright AFP 2010.